The blasts shook the centre of Gaza
In an interview with the BBC, Mr Arafat said the Israeli Government could not defeat the Palestinian people and must deal with him because he was their elected leader.
Palestinian hospital officials said at least 37 people had been injured, while the loud explosions which rocked central Gaza City sent schoolchildren and other passers-by scattering in panic.
Israel had warned it would react strongly after Palestinians apparently tested a new type of home-made rocket on Sunday, firing it into southern Israel for the first time.
Palestinian gunmen also killed two female soldiers and wounded up to 30 others near an army base in southern Israel on Sunday.
'In the same boat'
Israeli Prime Minister Ariel Sharon met his security chiefs to discuss a recent upsurge in Palestinian attacks, after returning from a three-day trip to the United States.
Mr Sharon has said he wants to work with an alternative Palestinian leadership.
He blames Mr Arafat for the ongoing violence in the Middle East and has held talks with senior officials Ahmed Qorei and Mahmoud Abbas, who Israel says might be more willing to deal with the militant problem.
But the Palestinian leader told the BBC that Mr Qorei and Mr Abbas are "my colleagues" and "in the same boat".
"[The Israelis] have to deal with the Palestinian people, who elected Yasser Arafat and who will elect after Arafat any leader, any president," he said.
Mr Arafat said he was doing all he could to control the militants.
"No-one can ask me to do more than I am doing because I am doing 100% effort, but no-one can give 100% results, including the most important superpower in the world, America."
And he flew into a rage at a question suggesting that suspects who were meant to have been in prison were still at large.
"You are repeating their big lies... they have destroyed all our prisons, and you are coming to ask me these bad questions, and wrong questions. Be fair," he snapped, before declaring the interview finished.
Response to attack
Hundreds of Palestinians tried to free prisoners from the Saraya compound after Monday's air strikes, although witnesses said the missiles had not been aimed at the jail but at nearby security and intelligence offices.
The streets were busy at the time of the first blasts, as children were returning home after their morning session at school. Most of the injured, who include police and journalists, had gone to the scene and were caught the second wave of blasts.
None of the 500 prisoners - both political and criminal detainees - are reported to have been released as their rescuers were dispersed by shots fired over their heads.
In an earlier attack on Sunday night, Israeli Apache helicopters fired at least eight missiles at a metal workshop in Jabaliya and Beit Laha in the northern Gaza Strip, Palestinian officials said.
Shops, a kindergarten and several houses in Jabaliya were damaged by the explosions.
More than 30 people were injured in the overnight strikes, including two United Nations workers, hurt by flying glass.
The United Nations special envoy to the region, Terje Roed-Larsen, said he was outraged that Israel had deployed bombs of heavy tonnage close to civilian areas and UN facilities.
"The parties must immediately go back to the table and address the political issues because bombs produce bombs," Mr Roed-Larsen told Israeli Army Radio.